Summary
- During the first trading session of the year, Brazilian oil giant Petrobras and lender Banco do Brasil SA, both under the control of the Brazilian government, tumbled about 4% and 6% apiece after President Luiz Inacio Lula da Silva announced a few consequential economic policies in his first days in office.
- The WisdomTree Emerging Markets ex-State-Owned Enterprises Fund eliminates exposure to companies classified as SOEs, which we define as those where the government owns more than 20% of shares outstanding.
- The circumstances surrounding Petrobras in Brazil are the latest anecdote to substantiate our view that SOEs should be avoided in emerging markets, and we further believe there will be more examples to justify this approach later in 2023.
For further details see:
Petrobras: A Case Study For Avoiding SOEs In Emerging Markets